Encouraging job creation

Nevadans need jobs. With a 14.5 percent unemployment rate, that is a given.

But the way to provide those jobs is not blatant manipulation of the free market and skirting the spirit of the Commerce Clause in the Constitution, which was written to prevent states from interfering with interstate commerce by imposing punitive taxes or tariffs on goods crossing state lines.

But somewhere along the way the courts managed to unearth a novel exception for laws like the one passed by the Assembly on a vote of 39-1 this past week. Assembly Bill 144, dubbed the Nevada Jobs First bill, gives bidders for state and local public works projects a preference if at least 50 percent of their workers and 25 percent of the materiel used is from Nevada and vehicles used on jobs are registered in Nevada.

The courts have held this is OK because the governments are not just throwing up roadblocks to interstate commerce but are, in fact, market participants because they are awarding the contracts and paying for the work.

Though only Assemblyman Ed Goedhart, R-Amargosa Valley, voted against the bill, others noted it probably will not produce many additional jobs for residents and could cost the taxpayers money when contractors who already qualify under the criteria pad their bids to take advantage of the 5 percent bidding margin given in-state firms. A project that once cost $10 million could now cost $10.5 million.

Assemblyman Goedhart said he believes in limited constitutional government and free markets, and this bill violates both principles. He also noted a Republican attempt to amend the bill to require all public project workers be confirmed through E-Verify as citizens or legal residents was rejected. He called the bill a handout to the Democratic base: unions.

No one has bothered to mention taxpayers are already getting stuck with bigger than necessary construction costs because of the state’s prevailing wage law. Under the prevailing wage law, public works contractors must pay workers what amounts to union scale. The state surveys contractors as to their salaries in various jobs, but generally only the unionized firms bother to reply.

Several years ago the Review-Journal investigated the cost to taxpayers of this expansive project-cost-padding law and estimated the final bill for every high school being built in Clark County was inflated by about $1 million due to the law.

Were the law to be repealed, the state and local governments could start more projects, resulting in more workers gaining employment. Because the wages would be competitively lower, there would be less incentive to import highly compensated out-of-state workers, rather than local labor.

But rather than repeal a law that costs Nevadans jobs and tax money, the Legislature chooses to press forward with a bill that would cost taxpayers still more money and would have little effect, if any, on joblessness.

We need fewer job-killing laws, not more.